German retail group Arcandor threw in the towel on Tuesday (June 9), filing for insolvency after the Berlin government rejected its request for emergency state aid.
Arcandor said the court filing covered its Karsdtadt department stores, Primondo GmbH mail-order and Quelle catalogue businesses but excluded Thomas Cook Plc, Europe's second-biggest travel group in which it holds a majority stake.
Arcandor shares were suspended down 21.7 percent before the official news.
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German retail group Arcandor threw in the towel on Tuesday (June 9), filing for insolvency after the Berlin government rejected its request for emergency state aid.
Arcandor said the court filing covered its Karsdtadt department stores, Primondo GmbH mail-order and Quelle catalogue businesses but excluded Thomas Cook Plc, Europe's second-biggest travel group in which it holds a majority stake.
Arcandor shares were suspended down 21.7 percent before the official news.
German Chancellor Angela Merkel said the insolvency filing offered the struggling company a chance to protect jobs, possibly in a deal with rival Metro.
"I think that the company now has a chance, particularly where jobs are concerned, and possibly in conjunction with others like Metro," Merkel said.
She added that "the commitments by the owners and creditors were for us completely insufficient."
"This was an unavoidable step but one which can be used to create new opportunities."
Frankfurt trader Oliver Roth of Close Broterhs Seydler said "the mismanagement within the last years brought this great enterprise to a situation where they could only survive with the help of the government," adding they did not get any money from the government.
Asked what Karstadt employee Ute Pokrzykowski expected to happen, she said "no money, that's what we are counting on."
She called it "the worst, to have no money at the end of the month."
"There are a lot of women with children working here who are single mothers and who have no idea how to pay the rent, even those without children," Pokrzykowski added.
A spokesman for Arcandor told reporters at the company's headquarters in Essen that "salaries for the employees will be paid for the months of June, July and August." Close